A plan to save Minnesota taxpayers $900 Million is not being embraced by House Republicans according to a recent MPR article. Rep Matt Dean, R-Dellwood, has authored a bill (HF 1665) to move 95,000 Minnesota Care recipients over to the MnSure exchange where they would purchase private insurance directly from the insurer, with a premium subsidy if needed. Rep Dave Baker. R-Willmar, Assistant Majority Leader, stated to MPR that he didn’t support such a move, at least not right now. Baker serves with Dean on the House Health and Human Services Reform committee. Currently, there is only one other sponsor of the bill in the House, Rep Glen Gruenhagen, R-Glencoe, and there is no companion bill in the Senate.
While liberal groups like Take Action Minnesota were strong supporters of Obamacare, they oppose moving more Minnesotans onto an Obamacare exchange to purchase their health insurance. The group has already organized phone banks and letter writing campaigns to oppose HF 1665.
Minnesota Care was established in 1992 and came out of the Children’s Health Plan and was established to target enrollment to children. Today 52% of the individuals using the program are adults without children. The program has been paid for by a 2% tax on Minnesota health care providers which generates over a billion dollars in revenue over a biennium. That tax is passed down via higher costs for health services and insurance to consumers and it is scheduled to sunset at the end of 2019. Without the provider tax, the Minnesota Care program is not sustainable in the long term. Minnesota Care currently can only charge up to $50 per month in premiums for individuals and has extremely low deductibles, $2.75 per month and $3 co-pays for doctor’s visits and prescription drugs as of 2014. The program is state run, but is administered through contracts with private insurers like Health Partners, Medica, and UCare. The idea behind “Minnesota Care II,” as it’s referred to in the Dean bill, is to have these same companies administer new insurance options that would fall under the MnSure exchange with premium subsidies to cover payment for those who need it.
With the Medicaid expansion that came with Obamacare, the income threshold for Medicaid eligibility was raised to 133% of federal poverty level (FPL) for adults with no minor children. For pregnant women and families, the threshold is 275% of FPL. Obamacare via the MnSure state exchange provides federal tax credits to purchase insurance for those individuals with incomes between 200-400% of FPL.
A gap then exists between adults with no minor children, with no employer-based health insurance that meets the federal affordability standards, who make between 133-200% of FPL, and this is where Minnesota Care fits. Dean’s plan would presumably cover this gap with state-based subsidies for coverage in the MnSure exchange. Rather than the state negotiating with the private insurers and administering Minnesota Care, the insurers would be held to state guidelines and work directly with the individuals via the exchange.
There are just two catches: Rep Dean also wants to repeal MnSure and move Minnesota to the federal exchange by 2017 along with thirty-seven other states, and the King vs. Burwell Supreme Court case could conceivably make the federal exchange obsolete. Still, it’s likely such changes would be incremental, and the ability to save nearly $1 Billion in tax funds while giving individuals direct access to private insurance plans would seem to be a win-win. In addition, economies of scale could be realized with a larger pool of individuals in MnSure plans.
As Chair of the House Health and Human Services Finance committee, Dean has some power to move the legislation, but he needs to find more support first. So far no Republican House or Senate leadership has voiced support for the plan publicly, though they do feature reduced spending to Health and Human services as a part of their budget proposals.
